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Why is depreciation added to net income in the Operating Activities category of the statement of cash flows when the indirect method is used?
Wiki User
∙ 10y ago
Depreciation is added back to net income to arrive on cash flow from operating activities because depreciation itself don't cause any inflow or outflow of cash that's why it is added back to net operating income.
Wiki User
∙ 10y ago
Wiki User
∙ 10y agoDepreciation is NON CASH Expense. By adding it back to Net income we get Income which is purely in Cash.
Lizy Louiza
Lizy Louiza
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In profit and loss statement where do you record bad debts?
In a profit and loss statement, bad debts are recorded as an expense. They are typically included in the "depreciation and bad debt" or "allowance for bad debts" category. This category is a deduction from revenues to reflect the estimated amount of uncollectible debts.
What category does Paid-in Capital fall into on the Cash flow statement?
Paid in capital is shown under cash flows from financing activities in cash flow statement.
How many years can you depreciate a Copier?
Look in your financial statement completed by your accountant, you should have depreciation % by category in the notes. If a copier doesn't have it's own category, you could include it with your hardware and/or computer depreciation. Usually it's around it's useful life expectancy. I would guess around 5 years but check with your accountant.
Which type of statement first states the product's membership in a category and then shows its point of difference from other members of the category?
mission statement
Which type of statement first states the product's membership in a category and then shows its point-of-difference from other members of the category?
Positioning statement
What category does the calculator belong?
operating system
What category the Windows 8 belong?
Windows 8 belongs to the Windows Operating System category.
Does telephone go on the income statement?
No, telephone expenses do not go on the income statement. Telephone expenses would be recorded as an operating expense on the income statement under the category of "Communication expenses" or similar designation.
What is a statement is true about sodium and chlorine?
They are both in the same category.
Which category of operating system is use for the smartphone?
single- user, multitask
PDAs use which category of operating system?
single-user,multitask
What is the capital gains tax on selling a second property?
Capital gains tax for all items of that category - there are many - is 15% of the gain...that is the amount above your basis in the property. Also, on items of property that have had depreciation taken, that depreciation must be recovered and taxed as ordinary income.
